Most residents of Indiana need a car or some form of transportation. There are many ways to get one, based on your financial situation and needs. Some choose to lease, which means they do not technically own the vehicle. This raises the question, do I need to report damage to a leased car?

Accidents happen, and damaging a car is incredibly common. From full wrecks to light scratches, wear and tear is going to happen in some way or another. When you do not own the car, but instead are renting it, this can lead you to worry about your leased car damage reporting obligations.

Luckily, Wagner Reese, LLP can assist you in understanding reporting damage to a leased vehicle: what you should know. While this guide will help you with the answers, reaching out to a trusted lawyer is your best path to understanding the full situation.

a car parked in a parking lot

Common Misconceptions on Leasing a Car

Leasing a car is similar to renting, except that rentals are usually meant for a shorter time. Leasing a car is more like an apartment, where you agree to pay over a long period to use a car you do not own, but intend to keep for a while. It can be an alternative to buying, likely cheaper than paying off a full purchase.

Some believe that leasing is riskier or more expensive than buying a car, but this is untrue. The lease payments are often cheaper than paying off a car loan, and there are no more risks than any other type of car ownership.

Others believe that leasing is only available for businesses, but this is also false. An individual can lease a car the same as any business, just on a smaller scale.

If you have any other questions on leasing, it would be best to discuss them with a professional. Wagner Reese, LLP would be perfectly happy to advise you on your options before you get into a contract.

Understanding Your Obligations as a Lessee

Taking on a car lease does leave you with a few obligations that ownership would not. This includes leased car damage reporting obligations, as damage will be assessed when you return the vehicle.

Depending on the lease, you may have limited miles you are allowed to drive, and a limited amount of damage you are allowed to incur. These matters should be worked out with the lessor in advance, before signing the lease. You may also have to keep a certain type of insurance, specified by the owner.

It is your responsibility as the lessee to follow all rules set out in the lease, from the moment you receive the keys to when you return the car. Make sure you understand the contract before you sign, and if possible, have a lawyer look over it to make sure you are getting the best possible deal.

Why It Is Important to Report Damage to a Leased Car

While certain types of damage, like minor scratches, should not be a problem, it is still important to report larger issues. If you are in a crash, the lessor may want you to have the vehicle repaired. If it is totaled in the crash, you may have to pay for the loss, depending on who was responsible.

Your lease may specify a certain timeframe in which you must report damage, in which case you should follow that carefully. Your insurance should cover the damages, but if you are in breach of your lease, you could wind up in more trouble. You may even find yourself in trouble with state consumer law, which can be difficult to recover from.

Returning your leased car damaged may incur some higher fees, especially if the damage was not reported and repaired beforehand. In situations like this, it is important to fully understand the agreement you signed, and follow along to the letter.

A Person Writing Notes About A Car

Reporting Damage to a Leased Vehicle: What You Should Know

Your lease will likely tell you who to contact if and when you have major damage, but a good rule is to report it as soon as possible. If you are in a crash, document everything that happened and get a police report before you make the call.

It is best not to have it repaired before you speak with the lessor. They may have certain places or ways in which they want the repair done, and they might not be happy if you disobey their wishes.

Going against the lease agreement in any way could have major consequences for you, so it is best to follow it closely. If you need lease agreement assistance, talk to your attorney about your options.

Legal Consequences of Not Reporting Damage

Not reporting the damage could break your lease, and result in having your vehicle repossessed. You will likely have to pay a fine, depending on how much money you still owe in your contract.

In conclusion, leased cars are in a particularly complex area given the multiple parties involved, regulations, internal policies and any amount of chained areas, so if you find yourself on a damaged leased car situation, always notify and comply with the standard procedures to

If you are injured in a wreck, or your car is otherwise damaged by another party, not reporting the damage could really hurt you. It may be difficult or impossible to file a personal injury law case against the responsible party, denying you compensation for the incident.